PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Global Reach
California almond exports have grown sharply since 2003, a function
of effective marketing by the California Almond Board, a reduction
in the tariff to a flat rate rather than a percentage of the
transaction price, and a widespread perception of health benefits.
Paramount, testing the water for pistachio exporting, sold $2 million
worth of pistachios in India during 2007 under the Sunkist
brand, mainly through a tie-in with Reliance Retail; Masten would
like to grow that number to $100 million.
Agricultural trade, including tariffs, has been left largely untouched
in the Uruguay and Doha rounds of multilateral trade negotiations,
so there is no global mechanism through which to address India’s
30.9% pistachio tariff. Instead, Paramount has been in direct talks
with the Indian government as well as with U.S. trade officials.
“We’ve made the case that if India reduces its duties by 5% as a
start, it will make consumer prices more attractive, they’ll see
greater sales, and overall tax revenues will go up,” Masten explains.
“In addition, they’ll see added employment and revenues
from value-added activities like sorting, roasting and packaging.”
Paramount does not plan to wait for the duties to come down. It is
currently finalizing a location near Vadodara, Gujarat for a
planned, $5 million pistachio processing facility that will sort, roast
and package up to 4,500 tons of nuts per year, selling raw
pistachios to importers and processed nuts to wholesalers and
retail chains. Masten expects the Paramount facility to be in place
and operating in time for Diwali in 2009.
The U.S.-India trade relationship has not been without its rough patches over the years, and several
key points of contention remain, with implications for California business:
• continued high tariffs, averaging 27% when excise taxes are included;
• a 2% education fund assessment (expanded under the 2007–08 budget) and a 1%
customs handling fee, assessed against shipment value plus tariff;
• a proposed increase in the current downloadable software tariff, from 10% to 12%;
• customs revaluation of import merchandise believed to have been unfairly discounted,
thereby inflating both transaction values and related duties; and
• currency controls limiting returns and chargebacks for damaged or defective
merchandise sourced in India.
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